Land reclamation isn’t cheap but soil becomes significantly more valuable when it’s moved to create new land in Manhattan, Boston’s Back Bay and Monaco

In real estate, location is everything—and that goes not just for buildings, but the ground beneath them as well.

Move a scoop of soil from Beverly Hills, Texas, to Beverly Hills, Calif., and its value soars.

To illustrate this idea more, well, concretely, Spread Sheet asked real-estate firm NeighborhoodX to look at some large-scale land-reclamation projects and the money they created by moving dirt from one place to another.

Before a 19th-century infill effort, Boston’s Back Bay neighborhood was exactly that—a bay. Today it is one of the city’s priciest residential districts, with homes going for an average of $1,384 a square foot, according the NeighborhoodX. Much of the material used to build up the area was excavated from nearby Needham, Mass., where prices average around $400 a square foot.

Likewise, New York’s Battery Park City was built, in part, atop sand shipped in from the southern shore of Staten Island during the early 1970s. That move took prices from around $350 a square foot in Staten Island to an average $1,431 a square foot in the lower Manhattan neighborhood.

Results in San Francisco’s Financial District are more mixed. Residential prices in the area average $1,183 a square foot today, well above the $388 a square foot average in Richmond, Calif., where a portion of the landfill came from throughout the second half of the 19th century. Another portion of the landfill, though, came from San Francisco’s Telegraph Hill neighborhood, where prices today average $1,448.

Federal and state regulations have essentially outlawed coastal infill projects in the U.S. due to environmental concerns, says Vishaan Chakrabarti, associate professor at Columbia University’s Graduate School of Architecture, Planning and Preservation. But, he says, "it’s still a very common practice in parts of Asia, the Middle East, and, in some cases, Europe."

Monaco is undertaking a $2.3 billion project to add 15 acres to its coast using sand imported from Sicily. The tiny Mediterranean principality is the world’s most expensive real-estate market according to real-estate firm Savills, with prices averaging $4,457 a square foot in 2017.

Land reclamation is expensive, so "you only really see it in top tier cities with really booming economies [and] great land scarcity," Prof. Chakrabarti says, citing as examples spots like Tokyo and Hong Kong.

Several years ago, Prof. Chakrabarti advised on a student proposal to connect lower Manhattan to Governors Island via infill. It is unlikely such a project could happen for legal and environmental reasons, but, he notes, it would be on solid ground financially. "It is very hard to argue with the economics of creating more Manhattan," he says.

DISCLAIMER: The currency conversion is provided for illustration purposes only. It is meant only as an approximation based on the latest information available and should not be relied upon for any other purposes. We are not responsible for any loss that you may incur as a result of relying on these currency conversions. All property prices are as stated by the listing agent.

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